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The DLA Strategic Materials Directorate

The Defense Logistics Agency Strategic Materials Directorate at Fort Belvoir, Va., began life in 1939 as the National Defense Stockpile Center, a warehouse of raw materials – mostly metals – considered vital to the production and maintenance of military equipment, weapons, etc. For the next half-century, it operated as a component of the General Services Administration (GSA), until President Ronald Reagan transferred it to the Department of Defense (DoD), where it ultimately became part of the DLA.

Under DLA’s rebranding effort, the name was changed to Strategic Materials (SM) in 2010. More importantly, however, have been the ongoing changes in what materials are on the strategic list and how DLA-SM has transitioned from warehousing to excess material sales to maintaining just the quantity of a reduced list of materials that may be needed to cover short-term shortages.

“We still have the same mission – to provide strategic and critical materials to DoD and essential civilian agencies in the event of a national emergency,” DLA-SM Administrator Ronnie Favors explained. “Over the years, there have been a lot of ups and downs in a program like this. At the peak, in the early 1980s, we handled 60 to 80 commodities; now we’re down to 22 [see table]. In 2001, we leased approximately 4.5 million square feet of warehouse space on 56 properties covering more than 5,000 acres; 10 years later, DLA Strategic Materials is leasing just under 2 million square feet of warehouse space on six properties with about 600 acres.

“It also was primarily a ‘buy and hold’ organization in the past. When I came here in 88’, we had just started the sale of excess materials. We’re trying to move away from that in the future because there is really no need to hold such large quantities of material. So we plan to buy buffer stocks – enough to bridge a gap. It will be a smaller program, but one we believe will be more cost-effective and timely in a post-Cold War world.”

Elemental mercury at the Somerville Depot, N.J., around 2005. The mercury has since been moved to Hawthorne Army Depot, Nev., part of the ongoing changes in materials stockpile management at DLA. DLA photo

The reduction in materials and locations also has been reflected in personnel, with today’s all-civilian workforce of 90 DLA-SM employees, plus contractors, a significant drop from more than 300 in the 1980s. However, the directorate also is now part of a larger parent organization – DLA has more than 26,000 civilian and military employees worldwide – on which to draw.

The sell-off of excess materials, totaling about $7 billion, also has reduced the overall value of the stockpile, currently about $1.4 billion. Some of the funds gained from those sales have covered DLA-SM’s operating expenses – it is self-supporting rather than a federal budget line item – but the bulk has gone to various other government programs, as directed by Congress.

Reductions in the number and quantity of materials acquired and stored by DLA-SM reflect the changing needs of technologies vital to the military and other major federal agencies, as well as changing sources for those still considered strategic. It is a dynamic process, in which a material considered strategic in 1995 may not be on the list in 2011, while others not listed as recently as 2001 may top it.

The current stockpile ranges from base metals, such as zinc, cobalt, and chromium, to the more precious metals, such as platinum, palladium, and iridium, with a new emphasis on rare earths. Even after the reduction, DLA-SM far exceeds the range of commodities and materials available for sale from any private-sector company in the world.

“Around 2006, at the behest of private-sector contractors concerned about shortages of some materials, Congress took a look at the stockpiling program,” Favors recalled. “That study, by the National Academy of Sciences, said there was a need to modernize the stockpiling program and make it more flexible and responsive to the nation’s needs.

“That was followed by an internal working group in 2009, headed by the Office of Industrial Policy [part of the Office of the Secretary of Defense (OSD)] and members of all the services, as well as the Department of Commerce and others, who came to basically the same conclusion. That led to the implementation plan to reconfigure the stockpile, which was submitted to Congress in August 2010 and activated in late September.”